ICPAC Kicked Off the first bi-annual virtual PAO Knowledge

Exchange for Accountancy Education Directors in Middle East and North Africa (MENA) region, launched by the International Federation of Accountants (IFAC)

The Below Article was published by IFAC post the completion of the presentation from Ms. Efi M. Marcou, Head of Learning and Development at the Institute of Certified Public Accountants in Cyprus (ICPAC) with subject “The challenge of attracting high[1] quality professional accountants – ICPAC’s Experience and Actions”.

Collaborating to Attract New Talent to the Profession: Working with Accountancy Education Directors in MENA

EFI MARCOU , HELEN PARTRIDGE, DANA JENSEN | NOVEMBER 28, 2022 IFAC, the World Bank and the Arab Federation of Accountants and Auditors (AFAA) hosted a webinar on June 21, 2022 to encourage regional collaboration, foster collaboration with those who influence the accounting education system, and provide access to experts (for more information, see Accountancy Education Ecosystems Are Complex. Our Ability to Attract Potential Accountants Suffers). As part of a pilot project targeting accountancy education in the Middle East and North Africa (MENA), IFAC launched the first bi-annual virtual PAO Knowledge Exchange for Accountancy Education Directors in MENA to provide a forum for conversation amongst peers on the unique challenges and opportunities we face within the profession in the region. The first knowledge exchange in the series, which attracted 125 registrants and 93 live participants, focused on how professional accountancy organizations (PAOs) can address the need for more high-quality professional accountants in MENA. The session kicked off with a presentation from Ms. Efi M. Marcou, Head of Learning and Development at the Institute of Certified Public Accountants in Cyprus (ICPAC). Efi shared ICPAC’s experiences and initiatives increasing the number of high-quality professional accountants in the jurisdiction. Following the presentation, participants discussed perspectives from their respective countries. In Cyprus, while the number of graduate accountants increased by 19.5% between 20142021, the number of students simultaneously decreased by 28.4%. After acknowledging the challenge at hand, ICPAC decided that it needed to not only increase the number of students in the pipeline, but to also increase the number retained after graduating. To do so, ICPAC first secured a firm strategic commitment from its Board to embed this area of focus in its day-today operations. This enabled ICPAC to allocate resources at hand to undertake specific, practical actions targeting tertiary education, secondary education, and the general public as detailed in the slides below. The full recording of the presentation can be viewed at the IFAC

Comment By Ifac

“We are very thankful to ICPAC and Efi Marcou for sharing their experience with respect to challenges faced in attracting high quality talent to the profession and some of the initiatives undertaken by ICPAC to overcome such challenges. The presentation was clearly appreciated by all PAO accountancy education directors from the Middle East and North Africa region in attendance and inspired discussion and action across the region.”

Helen Partridge - Director, Accountancy Education, International Federation of Accountants (IFAC)

YouTube channel.

PAOs need to step down and get closer to the stakeholder group that we as a profession are trying to embrace—we must make ourselves visible and accessible to students. We must also keep up to date with current accounting technology to avoid finding ourselves at a disadvantage in the war for talent. Given the rapid digital transformation taking place in the accountancy profession, many PAOs are considering opening their pipelines to candidates with skillsets in areas beyond what the CPA designation currently offers. By starting with targeting high school or secondary school students and drawing on recent high-quality college graduates, PAOs will inevitably be better poised to solidify long-term sustainability well into the future.

We look forward to enhancing and continuing these engagements!

CHRISTODOULIDES: he implementation of a comprehensive tax reform is one of the key policies of our Governmental Programme», as mentioned by the President of Cyprus Mr Nikos Christodoulides. In his exlusive interivew to ICPAC magazine «Accountancy Cyprus», he said:

• We are committed in modernizing the tax system and enhancing its competitiveness, while taking into consideration the digital and green transition.

• Within this framework, we are promoting a holistic tax transformation that will lead to a fair and simple tax system, promoting income redistribution and taking into consideration the current European and international developments, while retaining the elements that make Cyprus an attractive business destination. Also, he expresses his optimism that the Cyprus economy continues to demonstrate strong resilience, despite the effects of the pandemic and the ongoing war in Ukraine.

Which are the government forecasts for the remaining of the year 2023

The Cyprus economy continues to demonstrate strong resilience, despite the effects of the pandemic and the ongoing war in Ukraine. Both in 2021 and 2022, the economy exhibited strong growth of 6.6% and 5.6% respectively, while maintaining high employment rates.

As regards economic policy, the government will continue on the path of fiscal sustainability, the maintenance of a stable and robust financial system and the promotion of structural reforms. More specifically, our fiscal policy will be fully in line with that of the EU and the Eurozone, where strict fiscal rules apply. Our aim is to continue promoting critical structural reforms and the full utilization of all the available tools, such as the absorption of European funds for the green and digital transition.

At the same time, harnessing inflation in a socially just manner, while respecting fiscal viability will be the guiding principle for our economic policy making.

Taking all the above elements into consideration, I remain optimistic for the course of our economy. The projections of the Ministry of Finance Illustrate that growth is expected to continue on a positive path in the medium term, albeit at a decelerated pace, with an annual growth rate of around 3% in real terms, in 2023. Over the period

2024-2025, growth is expected to stabilize, with real GDP growth projected at 3.3% and 3.2% respectively. It is worth noting that further improvement in the balance position is expected, with the fiscal position reaching a surplus of 1.7% of GDP in 2023 and 2.3% of GDP in 2024 and in 2025, respectively. Debt-to-GDP ratio is estimated to continue its downward trend declining further to 70% by the end of 2025.

What other measures is the government considering in order to contain energy costs and inflation, and to enhance business competitiveness and the citizens standards of living?

The uncertainty introduced by geopolitical developments, require us to keep a vigilant stance. Having said that, the government will continue to take measures to alleviate the impact of the increase in energy prices for households and companies, in a responsible manner. As regards our main economic goals, we are promoting a growth model that will broaden the productive base of the economy, fully capitalizing on research, innovation and technology and utilizing our country’s rich human talent. In this framework, we endorse the long-term Economic growth strategy of Cyprus “Vision 2035”, will ensure the long-term viability, competitiveness and resilience of the economy, as well as the well-being of the citizens of Cyprus.

In parallel, there are two emblematic EU multi annual programmes in our disposal – Thalia and the RRP with a total budget of €3bn – that aim to shape the Cyprus of Tomorrow. Both programmes are already under implementation and include reforms and critical projects, as well as support schemes to businesses and citizens. The vision of this government is, among others, to further promote the digitization of the economy, to significantly decrease our carbon footprint and to enhance innovation and technological entrepreneurship. It should be noted that the investment programmes’ objectives are fully aligned with the Vision 2035 Strategy and support its implementation.

Having said that, we are fully aware of adverse effects that the challenges of the economy pose on the society as a whole. In this framework, the recent announcements to support the renovation of refugees housing, along with the ongoing support for increased energy prices, demonstrate the sensitivities of the government as regards the welfare of its citizens.

We will therefore continue implementing measures towards the most vulnerable, while ensuring the viability of public finances. We are committed to conducting economic policy in a responsible manner, without ignoring the realities on the ground, yet with a vision for having an economic model fit for the future.

What are your thoughts on the upcoming tax reform?

The implementation of a comprehensive tax reform is one of the key policies of our Governmental Programme. We are committed in modernizing the tax system and enhancing its competitiveness, while taking into consideration the digital and green transition.

Within this framework, we are promoting a holistic tax transformation that will lead to a fair and simple tax system, promoting income redistribution and taking into consideration the current European and international developments, while retaining the elements that make Cyprus an attractive business destination. This includes the adjustment of the VAT rates based on the relevant ECOFIN decision.

The Ministry of Finance is taking concrete steps towards the realization of this commitment, including the assignment of an expert study by academics, which will examine the tax framework of Cyprus, draw from best practices of other juristictions and pave the way for the reform, in full collaboration with social and economic stakeholders. It goes without saying, that we consider ICPAC as one of our key partners in this process, drawing from the valuable expertise and knowledge of the profession. Meanwhile and until the finalization of the study, we will be promoting a number of necessary amendments to alleviate the burden on the labour market, as well as on households and SMEs.

In addition, through the tax reform, we aim to reduce the para-economy by 15-20%, in line with the relevant objective of the Vision2035 strategy. It is also important to fight tax evasion through transparency and better information arising from the digital economy. In all our efforts, we remain committed to keeping the public engaged and fully on board in the whole process of this very important reform.

How will Economic Diplomacy contribute to the attraction of new foreign investment?

Economic Diplomacy is coordinated by the Ministry of Foreign Affairs through a targeted and specific Strategy that was adopted in October 2021 that has the attraction of Foreign Direct Investment at its core. The Strategy is being promoted through a collaborative and participative approach with all relevant Ministries and key organisations, like Invest Cyprus and that is a key element for its success. Furthermore, the Strategy allows for the utilization of Cyprus’ Diplomatic Missions network, which provide valuable insights and intelligence on business opportunities, in their host countries.

In this respect, the Government also works closely with the private sector in order to achieve our common goal, which is the further internationalization of our economy and its promotion as a competitive and attractive business hub.

Therefore, Economic Diplomacy contributes to attracting FDI both by articulating in a targeted way, the message of what it is that makes Cyprus an appealing destination for foreign investment. In other words, promoting a coherent brand for Cyprus, showcasing our country’s investment potential and highlights its comparative advantages.

What are your thoughts on a new credible and aligned with the EU requirements investment program for Cyprus?

The Government abolished the Cyprus Investment Program in November 2020 due to weaknesses that became evident. There is no intention of a new programme.

What further initiatives will you take towards the implementation of the reform of local government?

The reform of Local Government has been structured in three pillars, comprising of three different legislations, which were approved by the House of Representatives on the 3rd of March 2022. More specifically, the legislations are: (a) the Municipalities Law of 2022, (b) the Communities (Amending no.2) Law of 2022, and (c) the District Local Government Organisations Law of 2022. According to the government, this reform –based on appropriate technical and economic studies– will allow Cyprus to comply with the Recommendation 389(2016) of the Congress of Local and Regional Authorities of the Council of Europe, which has been used as a guide.

The new legislation for Municipalities involves a significant reorganisation of the present structure of Cypriot local authorities: 20 new municipalities will be established, following the amalgamation of the current 30 municipalities and 63 communities (out of the existing 350).

Furthermore, the legislation concerning the establishment of five District LocalGovernment Organisations, provides for the amalgamation of the existing sewage councils, water supply councils, solid waste management and the urban planning authorities, at a district level. The main aim of this legislation, is to improve the efficiency of water supply, sewerage and solid waste management through economies of scale, as well as implementing a unilateral policy on the issuing of urban planning and building permits at a district level.

What message would you like to deliver to ICPAC members?

ICPAC represents the professionals of one of the most critical sectors of our economy. Their high level of professionalism is something that we are proud of as a country. The Government appreciates the valuable contribution of ICPAC in all matters pertaining to economic policy and I am confident that our excellent long-standing cooperation will continue. I would also like to reiterate the Government’s commitment towards an economic policy that ensures the stability and competitiveness of our economy, allowing for further growth its key sectors, including those represented by the Accounting Profession.